DryShips Inc. Reports Financial and Operating Results for the Fourth Quarter 2012

DryShips Inc. Reports Financial and Operating Results for the Fourth Quarter 
2012 
ATHENS, GREECE -- (Marketwire) -- 03/06/13 --  DryShips Inc. (NASDAQ:
DRYS), or DryShips or the Company, an international provider of
marine transportation services for drybulk and petroleum cargoes, and
through its majority owned subsidiary, Ocean Rig UDW Inc., or Ocean
Rig, of offshore deepwater drilling services, today announced its
unaudited financial and operating results for the fourth quarter
ended December 31, 2012. 
Fourth Quarter 2012 Financial Highlights 


 
--  For the fourth quarter of 2012, the Company reported a net loss of
    $129.8 million, or $0.34 basic and diluted loss per share.
    
    
    Included in the fourth quarter 2012 results are:
    
    
    -- Costs associated with the 10-year class survey for the Eirik
    Raude of $43.9 million, or $0.12 per share;
     -- Loss on the sale of
    the newbuilding tankers Esperona and Blanca, of $41.3 million, or
    $0.11 per share.
    
    
    Excluding the above items, the Company's net results would have
    amounted to a net loss of $59.9 million, or $0.15 per share.(1)
    
    
--  The Company reported Adjusted EBITDA of $109.5 million for the fourth
    quarter of 2012, as compared to $169.0 million for the fourth quarter
    of 2011.(2)

  
Year Ended December 31, 2012 Financial Highlights 


 
--  For the year ended 2012, the Company reported a net loss of $246.8
    million, or $0.65 basic and diluted loss per share.
    
    
    Included in the year ended 2012 results are:
    
    
    -- Costs associated with the 10-year class survey for the Eirik
    Raude of $65.5 million, or $0.17 per share;
     -- Loss on the sale of
    the newbuilding tankers Esperona and Blanca, of $41.3 million, or
    $0.11 per share.
    
    
    Excluding the above items, the Company's net results would have
    amounted to a net loss of $162.8 million, or $0.43 per share.(1)
    
    
--  The Company reported Adjusted EBITDA of $500.5 million for the year
    ended 2012, as compared to $600.9 million for the year ended 2011.(2)

  
(1) The net result is adjusted for the minority interests of 35% of
Ocean Rig not owned by Dryships Inc. common stockholders as of
December 3
1, 2012.
 (2) Adjusted EBITDA is a non-GAAP measure; please
see later in this press release for reconciliation to net income. 
Recent Events 
-- On March 3, 2013, our customer European Hydrocarbons Limited, or
European Hydrocarbons, unilaterally cancelled our drilling contract
in West Africa for the Eirik Raude. Under the terms of the contract,
European Hydrocarbons will have to reimburse the Company with an
early termination payment of approximately $13 million plus accrued
work performed to date.  
-- On February 28, 2013, Ocean Rig signed definitive documentation
for a $1.35 billion syndicated secured term loan facility to
partially finance the construction costs of the newbuilding
drillships Ocean Rig Mylos, the Ocean Rig Skyros and the Ocean Rig
Athena, scheduled for delivery in July 2013, October 2013 and
November 2013, respectively. The facility has a five-year term and a
repayment profile of approximately 11 years and bears interest at
LIBOR plus a margin.  
-- On February 14, 2013, Ocean Rig received a Letter of Award (LOA)
from a major oil company for a three-year drilling contract offshore
West Africa with an estimated backlog of approximately $680 million,
including mobilization for the Ocean Rig Apollo, our newbuilding
drillship scheduled for delivery in January 2015. The contract is
scheduled to commence in the first quarter of 2015. The customer has
the option to extend the contract for four periods of six months
each, with the first option exercisable not less than one year before
the estimated completion date. The Company has the option to elect
the Ocean Rig Apollo or similar vessel, to drill under this contract.
The contract is subject to definitive documentation and customary
approvals. 
-- On February 14, 2013, the Company completed a public offering of
an aggregate of 7,500,000 common shares of Ocean Rig owned by
DryShips. The Company received approximately $123.2 million of net
proceeds from the public offering.  
-- On February 1, 2013, Ocean Rig entered into a firm four-well
program plus options, with Lukoil Overseas Sierra-Leone B.V., or
Lukoil, for the Eirik Raude for drilling offshore West Africa. The
contract has estimated duration of about 12 months and an estimated
backlog of approximately $217 million, including mobilization and
demobilization fees. This contract is scheduled to commence in the
second half of 2013, following the completion of the drilling
contract with ExxonMobil discussed below 
-- On January 14, 2013, the Company sold, via novation, two of its
tankers under construction at Samsung Heavy Industries Co. Ltd. Or
Samsung, Esperona and Blanca, to a third party. Under the terms of
the novation agreements the buyer assumed all rights, benefits and
obligations under the shipbuilding contracts, in exchange for a cash
consideration of $21.4 million paid by the Company to the buyer. 
-- On January 9, 2013, Ocean Rig entered into a drilling contract
with ExxonMobil Exploration and Production Ireland (Offshore)
Limited, or ExxonMobil, for a one-well program for the Eirik Raude
for drilling offshore Ireland. The contract has an estimated duration
of up to six months and an estimated backlog of approximately $112
million, including mobilization and demobilization fees. The contract
commenced on March 3, 2013, in direct continuation of the cancelled
contract with European Hydrocarbons.  
-- In December 2012, the Company reached an agreement with the lender
under its $90.0 million Senior Secured Credit Facility dated October
5, 2007, as amended, and its $130.0 million Senior Secured Credit
Facility dated March 13, 2008, as amended. Under the terms of these
agreements, the lender has agreed to waive the Company's breaches of
the value maintenance covenants until December 31, 2013 as well as to
defer certain installments to maturity. In exchange, the Company has
agreed to increase the pricing under the facility as well as provide
a full cash sweep up to a certain point in time. In addition, the
Company has agreed to provide a pledge over a portion of the Ocean
Rig shares owned by DryShips which pledge will be automatically
released on December 31, 2013. We estimate that the number of shares
subject to this pledge will be approximately 7,600,000. These
agreements are subject to definitive documentation which is expected
to be completed by the end of the first quarter of 2013. 
-- In December 2012, we reached an agreement with a far eastern
shipyard for a $12.5 million sellers credit to the Company. This
credit is repayable to the yard in one bullet repayment two years
after date of drawdown and it bears interest at LIBOR plus 300 basis
points per annum. The Company has agreed to provide a pledge of
1,602,500 shares in Ocean Rig that it owns, which pledge will be
automatically released upon repayment of credit. This agreement is
subject to definitive documentation, which is expected to be
completed by the end of the first quarter of 2013. 
George Economou, Chairman and Chief Executive Officer of the Company,
commented: 
"We continue to be bearish about the short-term performance of the
shipping markets. Both tanker and drybulk spot charter rates continue
to hover around historic lows. Unfortunately this comes at a time
when most of our lucrative legacy charters expire.  
As we have mentioned in previous quarters, low-cost financing for
traditional shipping assets is generally less available than before
and therefore the optimization of our newbuilding programs is our top
priority right now. We sold our only two unfinanced tankers and
eliminated approximately $100 million in CAPEX. With respect to our
Drybulk newbuilding program in China, we are still in discussions
with the shipyards in this respect to reduce and prolong our CAPEX
program. This process was never going to be easy but we still believe
a deal with a shipyard could be struck. Alternatively, we are seeing
interest for our vessels in the S&P market.  
Our shareholding in Ocean Rig has been our backstop. We recently sold
down a portion of our holdings for approximately $120 million. This
action was not a preferred option (especially at today's pricing
levels) but it was necessary. In addition, we have pledged some of
our Ocean Rig shares to our banks to remedy covenant breaches. We
continue to be bullish about the prospects for Ocean Rig. The backlog
currently stands at $5.1 billion over three years and provides Ocean
Rig with substantial cash flow visibility and growth. Given strong
industry fundamentals, we expect to further increase our already
substantial backlog by entering into long-term contracts for
remaining units."  
Financial Review: 2012 Fourth Quarter 
The Company recorded a net loss of $129.8 million, or $0.34 basic and
diluted loss per share, for the three-month period ended December 31,
2012, as compared to a net loss of $6.2 million, or $0.02 basic and
diluted earnings per share, for the three-month period ended December
31, 2011. Adjusted EBITDA was $109.5 million for the fourth quarter
of 2012, as compared to $169.0 million for the same period in
2011.(3) 
For the drybulk carrier segment, net voyage revenues (voyage revenues
minus voyage expenses) amounted to $34.9 million for the three-month
period ended December 31, 2012, as compared to $81.6 million for the
three-month period ended December 31, 2011. For the offshore drilling
segment, revenues from drilling contracts decreased by $7.9 million
to $229.8 million for the three-month period ended December 31, 2012,
as compared to $237.7 million for the same period in 2011. For the
tanker segment, net voyage revenues amounted to $6.5 million for the
three-month period ended December 31, 2012, as compared to $3.6
million for the same period in 2011. 
Total vessels', drilling rigs' and drillships' operating expenses and
total depreciation and amortization increased to $194.4 million and
$84.8 million, respectively, for the three-month period ended
December 31, 2012, from $119.6 million and $82.3 million,
respectively, for the three-month period ended December 31, 2011.
Total general and administrative expenses increased to $39.5 million
in the fourth quarter of 2012 from $36.7 million during the
comparative period in 2011.  
Interest and finance costs, net of interest income, amounted to $53.5
million for the three-month period ended December 31, 2012, compared
to $48.2 million for the three-month period ended December 31, 2011.  
(3) Adjusted EBITDA is a non-GAAP measure; please see later in this
press release for a reconciliation to net income. 
Fleet List 
 The table below describes our fleet profile as of March
4, 2013: 


 
                                                   Gross                    
                         Year                      rate     Redelivery      
                         Built  DWT      Type      Per day  Earliest Latest 
                         -----  -------  --------  -------  -------- -------
Drybulk fleet                                                               
------------------------                                                    
                                                                            
Capesize:                                                                   
Fakarava                 2012   206,000  Capesize  $25,000  Sept-15  Sept-20
Mystic                   2008   170,040  Capesize  $52,310  Aug-18   Dec-18 
Robusto                  2006   173,949  Capesize  $26,000  Aug-14   Apr-18 
Cohiba                   2006   174,234  Capesize  $26,250  Oct-14   Jun-19 
Montecristo              2005   180,263  Capesize  $23,500  May-14   Feb-19 
Flecha                   2004   170,012  Capesize  $55,000  Jul-18   Nov-18 
Manasota                 2004   171,061  Capesize  $30,000  Jan-18   Aug-18 
Partagas                 2004   173,880  Capesize  $10,000  Jun-13   Aug-13 
Alameda                  2001   170,662  Capesize  $27,500  Nov-15   Jan-16 
Capri                    2001   172,579  Capesize  $10,000  Nov-13   Mar-14 
                                                                            
Panamax:                                                                    
Raraka                   2012   76,037   Panamax   $7,500   Jan-15   Mar-15 
Woolloomooloo            2012   76,064   Panamax   $7,500   Dec-14   Feb-15 
Amalfi                   2009   75,206   Panamax   $39,750  Jul- 13  Sep- 13
Rapallo                  2009   75,123   Panamax   Spot     N/A      N/A    
Catalina                 2005   74,432   Panamax   $40,000  Jun-13   Aug-13 
Majorca                  2005   74,477   Panamax   Spot     N/A      N/A    
Ligari                   2004   75,583   Panamax   Spot     N/A      N/A    
Saldanha                 2004   75,707   Panamax   Spot     N/A      N/A    
Sorrento                 2004   76,633   Panamax   $24,500  Aug-21   Dec-21 
Mendocino                2002   76,623   Panamax   Spot     N/A      N/A    
Bargara                  2002   74,832   Panamax   Spot     N/A      N/A    
Oregon                   2002   74,204   Panamax   $9,650   Sept-13  Nov-13 
Ecola                    2001   73,931   Panamax   Spot     N/A      N/A    
Samatan                  2001   74,823   Panamax   Spot     N/A      N/A    
Sonoma                   2001   74,786   Panamax   Spot     N/A      N/A    
Capitola                 2001   74,816   Panamax   Spot     N/A      N/A    
Levanto                  2001   73,925   Panamax   Spot     N/A      N/A    
Maganari                 2001   75,941   Panamax   Spot     N/A      N/A    
Coronado                 2000   75,706   Panamax   Spot     N/A      N/A    
Marbella                 2000   72,561   Panamax   Spot     N/A      N/A    
Redondo                  2000   74,716   Panamax   $9,250   Sept-13  Nov-13 
Topeka                   2000   74,716   Panamax   Spot     N/A      N/A    
Ocean Crystal            1999   73,688   Panamax   Spot     N/A      N/A    
Helena                   1999   73,744   Panamax   Spot     N/A      N/A    
                                                                            
Supramax:                                                                   
Byron                    2003   51,118   Supramax  Spot     N/A      N/A    
Galveston                2002   51,201   Supramax  Spot     N/A      N/A    
                                                                            
                                                                            
                                                                            
                                                   Gross                    
                         Year                      rate     Redelivery      
                         Built  DWT      Type      Per day  Earliest Latest 
                         -----  -------  --------  -------  -------- -------
Newbuildings                                                                
                                                                            
Capesize:                                                                   
Newbuilding VLOC #5      2014   206,000  Capesize  Spot     N/A      N/A    
Newbuilding VLOC #2      2013   206,000  Capesize  Spot     N/A      N/A    
Newbuilding VLOC #3      2013   206,000  Capesize  Spot     N/A      N/A    
Newbuilding VLOC #4      2013   206,000  Capesize  Spot     N/A      N/A    
Newbuilding Capesize 1   2013   176,000  Capesize  Spot     N/A      N/A    
Newbuilding Capesize 2   2013   176,000  Capesize  Spot     N/A      N/A    
                                                                            
Panamax:                                                                    
Newbuilding Ice -class                                                      
 Panamax 1               2014   75,900   Panamax   Spot     N/A      N/A    
Newbuilding Ice -class                                                      
 Panamax 2               2014   75,900   Panamax   Spot     N/A      N/A    
Newbuilding Ice -class                                                      
 Panamax 3               2014   75,900   Panamax   Spot     N/A      N/A    
Newbuilding Ice -class                                                      
 Panamax 4               2014   75,900   Panamax   Spot     N/A      N/A    
                                                                            
Tanker fleet                                                                
------------------------                                                    
                                                                            
Suezmax:                                                                    
Bordeira                 2013   158,300  Suezmax   Spot     N/A      N/A    
Petalidi                 2012   158,300  Suezmax   Spot     N/A      N/A    
Lipari                   2012   158,300  Suezmax   Spot     N/A      N/A    
Vilamoura                2011   158,300  Suezmax   Spot     N/A      N/A    
                                                                            
Aframax:                                                                    
Alicante                 2013   115,200  Aframax   Spot     N/A      N/A    
Mareta                   2013   115,200  Aframax   Spot     N/A      N/A    
Calida                   2012   115,200  Aframax   Spot     N/A      N/A    
Saga                     2011   115,200  Aframax   Spot     N/A      N/A    
Daytona                  2011   115,200  Aframax   Spot     N/A      N/A    
Belmar                   2011   115,200  Aframax   Spot     N/A      N/A    

 
Drilling Rigs/Drillships: 


 
                                                                            
Unit                 Year built  Redelivery  Operating area     Backlog ($m)
-------------------- ----------  ----------  ------------------ ------------
Leiv Eiriksson          2001       Q1 - 16   Norway                 $627    
Eirik Raude             2002       Q3 - 13   Ireland                $112    
Eirik Raude             2002       Q4 - 14   Sierra Leone,          $217    
                                             Ghana, Ivory Coast             
Ocean Rig Corcovado     2011       Q2 - 15   Brazil                 $357    
Ocean Rig Olympia       2011       Q3 - 15   Ivory Coast,           $517    
                                             Gabon, Angola                  
Ocean Rig Poseidon      2011       Q1 - 13   Africa                  $22    
Ocean Rig Poseidon      2011       Q2 - 16   Angola                 $781    
Ocean Rig Mykonos       2011       Q1 - 15   Brazil                 $330    
                                                                            
Newbuildings                                                                
--------------------                                                        
Ocean Rig Mylos         2013       Q3 - 16   Brazil                 $680    
Ocean Rig Skyros        2013         N/A     N/A                     N/A    
Ocean Rig Athena        2013       Q1 - 17   Angola                 $750    
Ocean Rig Apollo        2015       Q1 - 18   West Africa          $680 (1)  
                                                                ------------
        Total                                                      $5,073   
                                                                ------------

 
(1) LOA is subject to definitive documentation.  
Drybulk Carrier and Tanker Segment Summary Operating Data (unaudited) 
(Dollars in thousands, except average daily results) 


 
                                                                            
Drybulk                        Three Months Ended          Year Ended       
                                   December 31,           December 31,      
                             ----------------------  ---------------------- 
                                2011        2012        2011        2012    
---------------------------- ----------  ----------  ----------  ---------- 
Average number of vessels(1)       36.1          36        35.8        35.7 
Total voyage days for                                                       
 vessels(2)                       3,226       3,312      12,831      13,027 
Total calendar days for                                                     
 vessels(3)                       3,325       3,312      13,068      13,056 
Fleet utilization(4)               97.0%      100.0%       98.2%       99.8%
Time charter equivalent(5)   $   25,306  $   10,547  $   26,912  $   15,896 
Vessel operating expenses                                                   
 (daily)(6)                  $    7,007  $    5,124  $    6,271  $    5,334 
                                                                            
                                                                            
Tanker                         Three Months Ended          Year Ended       
                                  December 31,            December 31,      
                             ----------------------  ---------------------- 
                                2011        2012        2011        2012    
---------------------------- ----------  ----------  ----------  ---------- 
Average number of vessels(1)        3.9         7.0         2.6         6.3 
Total voyage days for                                                       
 vessels(2)                         362         644         963       2,293 
Total calendar days for                                                     
 vessels(3)                         362         644         963       2,293 
Fleet utilization(4)              100.0%      100.0%      100.0%      100.0%
Time charter equivalent(5)   $   10,077  $   10,062  $   12,592  $   13,584 
Vessel operating expenses                                                   
 (daily)(6)                  $    8,895  $    6,781  $    9,701  $    7,195 

 
(1) Average number of vessels is the number of vessels that
constituted our fleet for the relevant period, as measured by the sum
of the number of days each vessel was a part of our fleet during the
period divided by the number of calendar days in that period. 
 (2)
Total voyage days for fleet are the total days the vessels were in
our possession for the relevant period net of dry-docking days.
 (3)
Calendar days are the total number of days the vessels were in our
possession for the relevant period including dry-docking days. 
 (4)
Fleet utilization is the percentage of time that our vessels were
available for revenue generating voyage days, and is determined by
dividing voyage days by fleet calendar days for the relevant period. 
(5) Time charter equivalent, or TCE, is a measure of the average
daily revenue performance of a vessel on a per voyage basis. Our
method of calculating TCE is consistent with industry standards and
is determined by dividing voyage revenues (net of voyage expenses) by
voyage days for the relevant time period. Voyage expenses primarily
consist of port, canal and fuel costs that are unique to a particular
voyage, which would otherwise be paid by the charterer under a time
charter contract, as well as commissions. TCE revenues, a non-U.S.
GAAP measure, provides additional meaningful information in
conjunction with revenues from our vessels, the most directly
comparable U.S. GAAP measure, because it assists our management in
making decisions regarding the deployment and use of its vessels and
in evaluating their financial performance. TCE is also a standard
shipping industry performance measure used primarily to compare
period-to-period changes in a shipping company's performance despite
changes in the mix of charter types (i.e., spot charters, time
charters and bareboat charters) under which the vessels may be
employed between the periods. Please see below for a reconciliation
of TCE rates to voyage revenues.
 (6) Daily vessel operating
expenses, which includes crew costs, provisions, deck and engine
stores, lubricating oil, insurance, maintenance and repairs is
calculated by dividing vessel operating expenses by fleet calendar
days for the relevant time period. 
(In thousands of U.S. dollars, except for TCE rate, which is
expressed in Dollars, and voyage days) 


 
                                                                            
 
                                                                            
Drybulk                        Three Months Ended           Year Ended      
                                  December 31,             December 31,     
                             ----------------------   --------------------- 
                                2011         2012        2011        2012   
---------------------------- ----------  ----------   ---------   --------- 
Voyage revenues              $   86,621  $   40,754  $  365,361  $  227,141 
Voyage expenses                  (4,985)     (5,821)    (20,047)    (20,064)
                             ----------   ---------   ---------   --------- 
Time charter equivalent                                                     
 revenues                    $   81,636  $   34,933  $  345,314  $  207,077 
                             ----------   ---------   ---------   --------- 
Total voyage days for fleet       3,226       3,312      12,831      13,027 
Time charter equivalent                                                     
 (TCE) rate                  $   25,306  $   10,547  $   26,912  $   15,896 
                                                                            
                                                                            
Tanker                         Three Months Ended           Year Ended      
                                   December 31,            December 31,     
                             ----------------------   --------------------- 
                                2011         2012        2011        2012   
---------------------------- ----------  ----------   ---------   --------- 
Voyage revenues              $    3,903  $   12,361  $   12,652  $   41,095 
Voyage expenses                    (255)     (5,881)       (526)     (9,948)
                             ----------   ---------   ---------   --------- 
Time charter equivalent                                                     
 revenues                    $    3,648  $    6,480  $   12,126  $   31,147 
                             ----------   ---------   ---------   --------- 
Total voyage days for fleet         362         644         963       2,293 
Time charter equivalent                                                     
 (TCE) rate                  $   10,077  $   10,062  $   12,592  $   13,584 

 
Dryships Inc. 
Financial Statements
 Unaudited Condensed Consolidated Statements of
Operations 


 
                                                                            
(Expressed in                                                               
 Thousands of U.S.                                                          
 Dollars except for                                                         
 share and per share     Three Months Ended              Year Ended         
 data)                      December 31,                December 31,        
                     --------------------------  -------------------------- 
                         2011          2012          2011          2012     
                     ------------  ------------  ------------  ------------ 
                                                                            
REVENUES:                                                                   
Voyage revenues      $     90,524  $     53,115  $    378,013  $    268,236 
Revenues from                                                               
 drilling contracts       237,658       229,751       699,649       941,903 
                      -----------   -----------   -----------   ----------- 
                          328,182       282,866     1,077,662     1,210,139 
                                                                            
EXPENSES:                                                                   
Voyage expenses             5,240        11,702        20,573        30,012 
Vessel operating                                                            
 expenses                  26,517        21,337        91,289        86,139 
Drilling rigs                                                               
 operating expenses        93,056       173,092       281,833       563,583 
Depreciation and                                                            
 amortization              82,280        84,843       274,281       335,458 
Vessel impairments                                                          
 and other, net            27,142        41,517       116,779        42,518 
General and                                                                 
 administrative                                                             
 expenses                  36,660        39,460       123,247       145,935 
Legal settlements                                                           
 and other                      -        (5,912)            -        (9,360)
                      -----------   -----------   -----------   ----------- 
                                                                            
Operating                                                                   
 income/(loss)             57,287       (83,173)      169,660        15,854 
                                                                            
OTHER INCOME /                                                              
 (EXPENSES):                                                                
Interest and finance                                                        
 costs, net of                                                              
 interest income          (48,181)      (53,456)     (129,598)     (205,925)
Gain/(loss) on                                                              
 interest rate swaps        2,298        (4,582)      (68,943)      (54,073)
Other, net                  1,441        (1,891)        9,023          (492)
Income taxes               (9,872)      (11,354)      (27,428)      (43,957)
                      -----------   -----------   -----------   ----------- 
Total other expenses      (54,314)      (71,283)     (216,946)     (304,447)
                      -----------   -----------   -----------   ----------- 
                                                                            
Net income/(loss)           2,973      (154,456)      (47,286)     (288,593)
                                                                            
Net income/(loss)                                                           
 attributable to Non                                                        
 controlling                                                                
 interests                 (9,193)       24,608       (22,842)       41,815 
                      -----------   -----------   -----------   ----------- 
                                                                            
Net loss                                                                    
 attributable to                                                            
 Dryships Inc.       $     (6,220) $   (129,848) $    (70,128) $   (246,778)
                      ===========   ===========   ===========   =========== 
                                                                            
Loss per common                                                             
 share, basic and                                                           
 diluted             $      (0.02) $      (0.34) $      (0.21) $      (0.65)
Weighted average                                                            
 number of shares,                                                          
 basic and diluted    375,495,260   380,179,472   355,144,764   380,159,088 

 
Dryships Inc. 
Unaudited Condensed Consolidated Balance Sheets  


 
(Expressed in Thousands of U.S.                                             
 Dollars)                              December 31, 2011   December 31, 2012
                                      ------------------  ------------------
                                                                            
ASSETS                                                                      
-------------------------------------                                       
                                                                            
  Cash and restricted cash (current                                         
   and non-current)                   $          656,709  $          720,458
  Other current assets                           246,169             338,446
  Advances for vessels and rigs under                                       
   construction and acquisitions               1,027,889           1,201,807
  Vessels, net                                 1,956,270           2,059,570
  Drilling rigs, drillships,                                                
   machinery and equipment, net                4,587,916           4,446,730
  Other non-current assets                       146,736             111,480
                                       -----------------   -----------------
  Total assets                                 8,621,689           8,878,491
                                       =================   =================
                                                                            
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
-------------------------------------                                       
                                                                            
  Total debt                                   4,241,835           4,386,715
  Total other liabilities                        441,192             623,757
  Total stockholders' equity                   3,938,662           3,868,019
                                       -----------------   -----------------
  Total liabilities and stockholders'                                       
   equity                             $        8,621,689  $        8,878,491
                                       =================   =================

 
Adjusted EBITDA Reconciliation 
Adjusted EBITDA represents net income before interest, taxes,
depreciation and amortization, vessel impairments, dry-dockings and
class survey costs and gains or losses on interest rate swaps.
Adjusted EBITDA does not represent and should not be considered as an
alternative to net income or cash flow from operations, as determined
by United States generally accepted accounting principles, or U.S.
GAAP, and our calculation of adjusted EBITDA may not be comparable to
that reported by other companies. Adjusted EBITDA is included herein
because it is a basis upon which the Company measures its operations
and efficiency. Adjusted EBITDA is also used by our lenders as a
measure of our compliance with certain covenants contained in our
loan agreements and because the Company believes that it presents
useful information to investors regarding a company's ability to
service and/or incur indebtedness. 
The following table reconciles net income to Adjusted EBITDA: 


 
                                                                            
(Dollars in         Three Months  Three Months                              
 thousands)            Ended          Ended      Year Ended     Year Ended  
                    December 31,  December 31,  December 31,   December 31, 
                        2011          2012          2011     
      2012     
                   -------------  ------------  ------------  ------------- 
                                                                            
Net loss           $      (6,220)     (129,848)      (70,128) $    (246,778)
                                                                            
Add: Net interest                                                           
 expense                  48,181        53,456       129,598        205,925 
Add: Depreciation                                                           
 and amortization         82,280        84,843       274,281        335,458 
Add: Impairment                                                             
 losses and other         32,584        41,339       144,688         41,339 
Add: Dry-dockings                                                           
 and class survey                                                           
 costs                     4,643        43,745        26,135         66,506 
Add: Income taxes          9,872        11,354        27,428         43,957 
Add: Gain/(loss)                                                            
 on interest rate                                                           
 swaps                    (2,298)        4,582        68,943         54,073 
                   -------------  ------------  ------------  ------------- 
Adjusted EBITDA    $     169,042       109,471       600,945  $     500,480 
                   =============  ============  ============  ============= 

 
Conference Call and Webcast: March 7, 2013 
As announced, the Company's management team will host a conference
call, on Thursday, March 7, 2013 at 9:00 a.m. Eastern Standard Time
to discuss the Company's financial results. 
Conference Call Details 
Participants should dial into the call 10 minutes before the
scheduled time using the following numbers: 1(866) 819-7111 (from the
US), 0(800) 953-0329 (from the UK) or +(44) (0) 1452 542 301 (from
outside the US). Please quote "DryShips." 
A replay of the conference call will be available until March 14,
2013. The United States replay number is 1(866) 247- 4222; from the
UK 0(800) 953-1533; the standard international replay number is (+44)
(0) 1452 55 00 00 and the access code required for the replay is:
2133051#. 
A replay of the conference call will also be available on the
Company's website at www.dryships.com under the Investor Relations
section. 
Slides and Audio Webcast 
There will also be a simultaneous live webcast over the Internet,
through the DryShips Inc. website (www.dryships.com). Participants to
the live webcast should register on the website approximately 10
minutes prior to the start of the webcast. 
About DryShips Inc. 
DryShips Inc. is an owner of drybulk carriers and tankers that
operate worldwide. Through its majority owned subsidiary, Ocean Rig
UDW Inc., DryShips owns and operates 10 offshore ultra deepwater
drilling units, comprising of 2 ultra deepwater semisubmersible
drilling rigs and 8 ultra deepwater drillships, 3 of which remain to
be delivered to Ocean Rig during 2013 and 1 is scheduled for delivery
during 2015. DryShips owns a fleet of 46 drybulk carriers (including
newbuildings), comprising 12 Capesize, 28 Panamax, 2 Supramax and 4
newbuilding Very Large Ore Carriers (VLOC) with a combined deadweight
tonnage of approximately 5.1 million tons, and 10 tankers, comprising
4 Suezmax and 6 Aframax, with a combined deadweight tonnage of over
1.3 million tons. 
DryShips' common stock is listed on the NASDAQ Global Select Market
where it trades under the symbol "DRYS." 
Visit the Company's website at www.dryships.com 
Forward-Looking Statement 
Matters discussed in this release may constitute forward-looking
statements. Forward-looking statements reflect our current views with
respect to future events and financial performance and may include
statements concerning plans, objectives, goals, strategies, future
events or performance, and underlying assumptions and other
statements, which are other than statements of historical facts. 
The forward-looking statements in this release are based upon various
assumptions, many of which are based, in turn, upon further
assumptions, including without limitation, management's examination
of historical operating trends, data contained in our records and
other data available from third parties. Although we believe that
these assumptions were reasonable when made, because these
assumptions are inherently subject to significant uncertainties and
contingencies which are difficult or impossible to predict and are
beyond our control, we cannot assure you that it will achieve or
accomplish these expectations, beliefs or projections. 
Important factors that, in our view, could cause actual results to
differ materially from those discussed in the forward-looking
statements include the strength of world economies and currencies,
general market conditions, including changes in charterhire and
drilling dayrates and drybulk vessel, drilling rig and drillship
values, failure of a seller to deliver one or more drilling rigs,
drillships or drybulk vessels, failure of a buyer to accept delivery
of a drilling rig, drillship, or vessel, inability to procure
acquisition financing, default by one or more charterers of our
ships, changes in demand for drybulk commodities or oil, changes in
demand that may affect attitudes of time charterers and customer
drilling programs, scheduled and unscheduled drydockings and
upgrades, changes in our operating expenses, including bunker prices,
drydocking and insurance costs, changes in governmental rules and
regulations or actions taken by regulatory authorities, potential
liability from pending or future litigation, domestic and
international political conditions, potential disruption of shipping
routes due to accidents and political events or acts by terrorists. 
Risks and uncertainties are further described in reports filed by
DryShips Inc. with the U.S. Securities and Exchange Commission. 
Investor Relations / Media: 
Nicolas Bornozis
Capital Link, Inc. (New York)
Tel. 212-661-7566
E-mail: dryships@capitallink.com 
 
 
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